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Category: Taxation

Marriage is Taxing

Posted on, Mar 13, 2017 in Taxation by

Just when Spring Fever is about to burst out, the reality that there is no romance without finance has to be addressed. Marriage is taxing – I don’t just mean that it is a lot of work emotionally or physically – rather there are financial tax consequences if you are married as of December 31st.  Your tax status is synonymous with your marital status. If you are married at the stroke of midnight on December 31st, then you are considered married for tax purposes for the entire year. It does not matter what your heart says or what your Facebook status lists, New Year’s Eve is the bright line test. Since money is so often the focus of  marital disputes, you owe it to yourself and to your marriage to analyze the consequences of saying “I Do” to Uncle Sam in March of each year before you start the annual walk down the aisle of joint returns. You also owe it to yourself to understand the actual financial facts of your relationship. While in general most married couples save money if they file jointly, each couple still should have a professional calculate the actual amount of taxes that have to be paid if they were to file jointly or separately for the past tax year. Ideally, this determination should be made before estimated tax payments are made using both parties’ Social Security numbers. Combining spouses’ incomes can result in more taxes being paid than if each party had filed separately.  […]